Pacific Keys Central [2007] QBCCMCmr 348 (7 June 2007)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the

owners of lot 44, Russell Alan Sayers and Susan Isabel Sayers and the owner of lot 56, John Reginald Upton

I hereby order that the application for the following orders:

1. (a) That motion 14 of the AGM of 30 September 2005 (Extension of Caretaking & Letting Agreement) be ruled out of order.
(b) That the minutes of the AGM of 18 September 2006 be amended to show that the committee would seek legal advice in relation to motion 14.

2. Declare motion 13 of the AGM of 18 September 2006 (Office Opening Times), which was ruled out of order, valid and passed.

3. Declare motion 17 of the AGM of 18 September 2006 (Visitors Parking at Front Entrance), which was ruled out of order, valid and passed.

4. Declare motion 18 of the AGM of 18 September 2006 (All Committee, AGMs, EGMs to be held on site at PKC), which was ruled out of order, valid and passed.

is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 1071-2006

"Pacific Keys Central" CTS 10021

Scheme

"Pacific Keys Central" (PKC) community titles scheme 10021 was registered as a building units plan (now known as building format plan) of subdivision on 2 September 1982 comprising 63 lots and common property. The scheme is regulated by the Act and its Standard Module.

Application

This application is brought by the owners of lot 44, Russell Alan Sayers and Susan Isabel Sayers and the owner of lot 56, John Reginald Upton (the applicants), against the body corporate, seeking the following orders:

The grounds to the application, in respect of each of the orders sought, are to the following effect:

Motion 14 of AGM of 30 September 2005

At the annual general meeting (AGM) on Friday 30 September 2005, a motion was put to the meeting requesting that motion 14 (which proposed to extend the existing caretaking and letting agreement) be ruled out of order due to lack of information relating to the BCCM Form 20. The body corporate manager ruled the motion out of order citing the proviso that the committee would seek legal advice. A year later, at the AGM on 18 September 2006, the body corporate was asked the outcome of the above. The body corporate manager stated that there had been an oversight, and as nothing had been done to comply, action would be taken by the committee to seek legal advice. The PKC letting agreement shows both Mark Hayward and Heather Hayward as the letting agents. Subsequent Form 20’s have shown both as letting Agents. Heather Hayward was not a letting agent at these times.

Motion 13 of AGM of 18 September 2006

Motion 13 (office opening times) was ruled out of order by the body corporate manager because, according to her, the resident managers’ hours are determined by the committee. However, at the previous AGM on 30 September 2005, a motion to vary the office hours was accepted. The office hours are set in the agreement and can only be changed at a general meeting. Voting for motion 13 was recorded and if not ruled out of order, would have been passed by a majority vote.

Motion 17 of AGM of 18 September 2006

This motion (visitors parking at front entrance) was ruled out of order because, according to the body corporate manager, the parking in question is controlled by Pacific Keys Services, not PKC. Subsequently, information including a site plan was forwarded to the body corporate manager clearly showing that the parking in question is under the jurisdiction of the Pacific Keys body corporate. Voting for the motion was recorded and if not ruled out of order, would have been passed by a majority vote.

Motion 18 of the AGM of 18 September 2006

Motion 18 (all committee, AGMs, EGMs to be held on site) was ruled out of order by the body corporate manager because, according to her, the location of the meeting is determined by the committee. The existing location used is not suitable for many owners; it is difficult to get to and there is insufficient parking. Voting for this motion was recorded and if not ruled out of order, would have been passed by a majority vote, with over 70% of owners voting for it.

Submissions

Submissions in response to the application were sought from all owners (excluding the applicants) and the committee. A total of nine submissions were received, eight from individual owners (including one from the resident managers) and one from the committee. None of the submissions supported the first order sought being granted. One submission supported the making of the second order sought, two supported the making of the third order sought and three supported the making of the fourth order sought. General support for the resident managers was evident in several submissions.

The applicants exercised their right to inspect the submissions made and replied to them.

Jurisdiction

This is a dispute between two owners and the body corporate concerning claimed contraventions of the Act and/or the exercise of rights or powers or the performance of duties, under the Act, and comes within the dispute resolution provisions of the Act.^[1]

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Decision

Compliance with Section 242 Time Limit for First Order Sought
Motion 14 of AGM of 30 September 2005

The first order sought, in effect, seeks to declare void a resolution of the body corporate made at an AGM on 30 September 2005. Section 242 of the Act prescribes that such an application must be made within 3 months of the meeting at which the resolution was passed or purported to be passed. This application was lodged on 18 December 2006 and amended for the final time before processing, on 13 February 2007, some 16 months after the relevant AGM was held, well beyond the 3 month legislative time limit. Section 242(3) of the Act provides that, despite non-compliance with section 242(2), the application proceeds and an adjudicator may, for good reason, waive the non-compliance.

Any examination of whether the time limit should be waived involves consideration of the following statement made by Judge Dodds in the appeal of Weeks v. Commissioner for Body Corporate (Maroochydore District Court Appeal 13/99), at pages 4 and 5 of the judgment, "... the objects of the Act, for instance section 5(a) and (h) militate against too strict or legalistic a view about good reason for waiving non-compliance with the time limit. What will be required is a balancing of the length of the delay; the reason for the non-compliance; the effect of delay on others who are affected by the matter in dispute and importantly, whether apart from the question of non-compliance with the time requirement, an applicant will be entitled to the relief sought. The applicant, being the person seeking a waiver, will have the task overall of satisfying the
adjudicator that the time limit should be waived in all the circumstances."

The applicants provide the following reasons for the delay in lodging this application:

With regard to the first two factors mentioned by Judge Dodds, in my view, the period of delay in the applicants lodging their application is substantial; more than five times the 3 month time limit. Further, I regard the reasons given by the applicants for the non-compliance with the time limit as insufficient. At least one of the applicants was present at the 2005 AGM and the outcome regarding motion 14 was declared at the meeting. I do not see any reason why the applicants could not have lodged the application immediately after the meeting, or, upon receipt of the minutes of the meeting (which appear to contradict the applicants’ version of events), or, at the very latest, upon receipt of the minutes of the committee meeting of 17 February 2007, when the committee authorised the variation of the manager’s agreement in accordance with motion 14, which was purportedly passed at the AGM of 30 September 2006.

Considering the final two factors Judge Dodds mentions, namely, the effect of delay on others who are affected by the matter in dispute and importantly, whether apart from the question of non-compliance with the time requirement, an applicant will be entitled to the relief sought, I remain unconvinced that the time limit should be waived. In particular, I note that the resident managers have continued to perform duties at the scheme under the expectation that they have secured a four year extension to the term of their original agreement. Further, none of the submissions received supported the making of the first order sought. Finally, I do not believe the applicants have provided sufficient grounds to persuade me that they are entitled to the relief sought. Specifically, the deficiencies they allege with the BCCM Form 20 have not been sufficiently particularised, nor has any owner (including the applicants) claimed to have been disadvantaged by any deficiency with the BCCM Form 20. In these circumstances, I decline to waive the non-compliance with the time limit prescribed by section 242.

I do not propose to consider the requested amendment to the minutes of the AGM of 18 September 2006 to show that the committee, in relation to motion 14 of the AGM of 30 September 2005, would seek legal advice, for similar reasons. Even though the order sought purports to relate to the AGM of 18 September 2006, it is clear that the cause for the complaint arose from the 2005 AGM, as evidenced by the email relied upon by the applicants, from Janice McCarthy to Russell Sayers, dated 27 September 2005.

I propose to dismiss the first order sought, on the basis of non-compliance with the time limit prescribed by section 242 of the Act.

Compliance with Section 242 Time Limit for Orders Sought 2, 3 and 4

This application was initially lodged on 18 December 2006, but was amended several times, the last time being 13 February 2007, before investigation by this office, in terms of seeking submissions from interested parties, could begin. Importantly, the prescribed application fee was not paid until 9 January 2007. Section 239(1)(c) of the Act states that an application must be accompanied by the fee prescribed under a regulation. In my view, it is arguable that this also places the application for the second, third and fourth orders sought outside the 3 month time limit prescribed by section 242 of the Act.

It is apparent from the explanation given by the applicants for the length of delay in lodging their application in respect of the first order sought, that they believe the application for the remaining orders sought was lodged within three months of the 2006 AGM. Hence, no explanation for any delay is provided, despite administrative staff of this office specifically requesting reasons for the delay in lodging the application on at least two separate occasions.

Although the period of delay is not substantial, it is difficult to waive the non-compliance with no explanation given for the delay. However, because the motions sought to be declared passed have not been implemented, the delay could have little affect on others affected by the matters in dispute, provided any orders made are not retrospective. The grounds to the application and the submissions made reveal that there may have been some non-compliance with legislative procedure. Further, some submissions from owners evidence some level of support for the applicant in respect of the second, third and forth orders sought. Balancing all of these factors, I have decided to waive any non-compliance with the time limit prescribed by section 242 of the Act and will proceed to consider the applicants’ request for the second, third and fourth orders sought.

Power to Rule Motions Out of Order

Section 47 of the Standard Module details the power of a person chairing a general meeting to rule motions out of order. It provides as follows:

I have some concerns that section 47 has not been complied with in several respects. Firstly, there is no record in the minutes of the 2006 AGM of the reasons why motions 13, 17 and 18 were ruled out of order. Secondly, there is no evidence that the person chairing the meeting (as opposed to the body corporate manager) made the rulings, or advised the persons present and entitled to vote that they could reverse the ruling. Finally, I’m not convinced that the reasons that were given for the motions being ruled out of order (as documented in Ms McCarthy’s letters of 2 August in respect of motions 13 and 18, and detailed in the applicants’ grounds), are sufficient, nor did they necessarily warrant the rulings made.

In respect of motion 13, although the caretaking and letting agreement does makes provision for the office hours of the resident managers to be "agreed by the committee", any decision of the committee is subject to a contrary decision of the body corporate. Section 101(2) of the Act provides that the committee must put into effect the lawful decisions of the body corporate. The body corporate has an obligation to act reasonably and for the benefit of owners.^[2] The body corporate manager is clearly wrong when she states, in her letter to the Sayers of 2August 2006, that "The Legislation does not allow for owners to regulate the Committee’s decisions."

In respect of motion 18, Ms McCarthy errs again when she states, in her letter to Mr Upton of 2 August 2006, that "The location of the Meeting is determined by the Committee. An owner cannot regulate the Committee’s decisions." In relation to the place of general meetings, section 44 of the Standard Module provides as follows:

In relation to the place of committee meetings, section 29 of the Standard Module provides as follows:

A perusal of sections 29 and 44 of the Standard Module reveals that, although the place of committee meetings can be determined by the committee members, the place of general meetings can be determined by owners.

In respect of motion 17, the applicants have not sufficiently identified the nature of the parking spaces they are referring to in order to enable me to make a determination in this matter. Motion 17 merely states "That all parking spaces opposite the front entrance to Pacific Keys Central be restricted to visitors only parking with appropriate signage." The applicants do not state whether the spaces are common property spaces over which rights of exclusive use have been granted pursuant to by-law 45 (although this does not appear to be the case), designated visitor car parking, as required by Gold Coast City Council, or merely common property over which no rights of exclusive use exist.

If the car spaces in question are common property over which no rights of exclusive use exist and are not designated visitors’ spaces, by-law 11 regulates parking in them as follows:

If the car spaces in question are designated visitors’ spaces, then the following extract from an adjudicator’s order (0693-1999) covers the situation:

While it may be true that the visitor car spaces may be vacant much, or most, of the time, these are designated visitor spaces required by the local government, the Gold Coast City Council, to be used for visitor’s parking. These spaces are a universal local government requirement for the registration of a community titles scheme, and remain a continuing requirement of the scheme. Even if the body corporate wanted to use these spaces for resident parking, or some other purpose, it is not able to do so.

On the basis of the above, it appears as though motion 17 was correctly ruled out of order, on the basis that the subject is already covered in the by-laws and local government regulations. In any event, the committee has since erected signage (although the applicants regard it as inadequate).

Motions 13 and 18 (at least that part relating to general meetings) should not have been ruled out of order. However, it does not necessarily follow that I will make orders declaring those motions passed.

In respect of motion 13, it is argued by the committee that it involved a variation to the caretaking and letting agreement, and should have been tabled as a variation to the agreement, with the appropriate attachments. The applicants point out that this was not the reason the motion was ruled out of order. The applicants state that the voting results for motion 13 were that the motion would have been passed. However, the voting results for motion 13 have not been provided to me. I therefore suggest that the motion be re-considered at the next general meeting at which it is practicable to do so (the applicants may consider re-submitting it). If the motion is passed, the committee is bound to implement it. Whether this means the committee is then bound to negotiate with the resident managers in accordance with the Caretaking and Letting Agreement, or seek a variation to the caretaking and letting agreement (which would have to be voted on by all owners in general meeting) is not a question I have jurisdiction to determine^[3].

In respect of motion 18, it appears as though all general meetings of the body corporate are held on site. It is only committee meetings that are held off site – at the premises of the body corporate manager. As stated above, while the owners have power to determine the place of general meetings, it is up to the committee to determine the place of committee meetings. I therefore decline to make an order declaring motion 18 passed.

I have made an order dismissing the application.

^[1] See sections 226, 227 & 228
^[2] See sections 94 and 152 Act
^[3] Section 265 Act requires such matters to be determined by specialist adjudication.

Number of Scheme:	10021
Name of Scheme:	Pacific Keys Central
Address of Scheme:	54 Hooker Boulevard MERMAID WATERS QLD 4218

1.	(a) That motion 14 of the AGM of 30 September 2005 (Extension of Caretaking & Letting Agreement) be ruled out of order.
(b)	That the minutes of the AGM of 18 September 2006 be amended to show that the committee would seek legal advice in relation to motion 14.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Pacific Keys Central [2007] QBCCMCmr 348 (7 June 2007)